08.06.12, 20:41–The Knesset plenum on Monday approved a series of tax hikes meant to stabilize the Israeli economy.

The vote on the bill, dubbed “The bill to reduce the deficit and handle the global economic crisis,” was carried 28:16; 76 Knesset member were absent from the vote.

One of the measures approves was the Finance Committee’s recommendation to raise VAT by 1% to 17%, starting in September.

Just moments before the session, the government caved in to pressure and agreed to cancel some of the income tax hikes but did not increase corporate income tax.

The government accepted Knesset Finance Committee Chairman Moshe Gafni (United Torah Judaism) proposal that the government abandon its plan to raise the income tax for people earning over NIS 8,870 (about $2,200) by 1%, and instead increase the income tax collected from employees earning more than NIS 14,000 (some $3,500) by the same amount.

Speaking before the vote, Finance Minister Yuval Steinitz, who mentioned Sunday’s terror attack on the Egyptian border said: “Like the security situation, in the economic situation we have no one to put our trust in but ourselves – and God.”

According to Steinitz, the original framework of the plan is being maintained “We are presenting the Knesset with a package, with several internal changes, of NIS 14 billion ($3.52 billion) to cover the deficit.”…Read More>>

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